Legal information for Victorian community organisations
This fact sheet covers:

what is a constitution?

why would we need to change our constitution?

our organisation has ‘rules’ or ‘articles’- is this the same as a constitution?

what is the legal process for making changes to our constitution?, and

what issues should we look out for before we change our constitution?
This fact sheet assists Victorian not-for-profit community organisations to understand
some of the issues that arise when making changes to their constitution or rules. It
includes information about changing the constitution for an incorporated association,
companies limited by guarantee (CLGs) and co-operatives.
New laws for Victorian incorporated associations came into effect on 26 November 2012.
This information sheet reflects these new laws. The new laws include new model rules for
incorporated associations.
There is a transition period until 26 November 2013, where associations using the old model rules
can elect to transfer to the new model rules. On 26 November 2013, all associations still using the
old model rules will automatically be transferred to the new model rules. This fact sheet includes
references to both the old and new model rules.
Associations with their own rules can continue to use their own rules, but where their rules do not
address matters required by the new laws, the new model rule that deals with that matter will
automatically apply to that association.
ACNC: Some regulation of companies that are registered as charities will move from ASIC to the
Australian Charities and Not-for-profits Commission (ACNC) during 2013. The ACNC will contact
registered charities to explain how the changes affect them.
Every community organisation needs to have a constitution or rules. This is the document that
contains the rules of the organisation, describes its basic structure and processes, and will usually
specify:
Changes to an organisation’s constitution or rules
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 the aims or purposes of the organisation
 how the members of the organisation are admitted
 the rights and obligations of members
 how the office-bearers and members of the governing body are elected or appointed
 how general meetings of members and meetings of the governing body are convened and
conducted
 how the organisation is managed, especially its finances, and
 what will happen to the organisation's assets if it is wound up.
It is important that the constitution accurately reflects how your organisation operates in practice. It’s
no use having a constitution that no one looks at or follows, so you may need to change your
constitution to bring it up-to-date.
You may also need to change your constitution to implement a new structure, meet requirements of a
new licence or funding arrangement, to alter the way in which the organisation operates or to reflect
any changes in the law.
The terminology for governing documents varies depending on whether your organisation is an
incorporated association, a CLG or a co-operative (discussed further below). Nonetheless, the terms
can generally be used interchangeably.
You can usually tell from an organisation’s name whether it is an incorporated association, a CLG or a
co-operative. All incorporated associations are required to have 'Incorporated' or 'Inc' at the end of
their names (for example, ABC Org Inc.). Most CLGs have 'Limited' or 'Ltd' at the end of their names
(although some have an exemption from this requirement). All co-operatives must have “Cooperative”, 'Cooperative' or 'Co-op' in their names, and 'Limited' or 'Ltd' at the end.
To confirm of the type of organisation yours or another is, you can search its name on the Australian
Business Number website or the Australian Securities and Investments Commission (ASIC) website (for
companies) or the Consumer Affairs Victoria (CAV) website (for incorporated associations and
co-operatives)..
Changes to an organisation’s constitution or rules
© 2014 Justice Connect. This information was last updated on 26 November 2012 and does not
constitute legal advice, full disclaimer and copyright notice at www.nfplaw.org.au/disclaimer.
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Incorporated associations
An incorporated association registered under the Victorian Associations Incorporation Reform Act
2012 is required by that Act to have rules that include a statement of purposes as well as a number of
other matters. While organisations used to submit their purposes separately to their rules, the rules
and purposes now form one document (if your organisation registered under the old system your
purposes are now considered part of your rules).
CLGs
A CLG registered under the federal Corporations Act 2001 (Cth) will have either a single constitution
(for newer organisations) or two separate documents: a 'memorandum of association' and 'articles of
association' (for older organisations that have not updated their constitution). The aims of a CLG are
expressed through the 'objects' contained in its constitution or memorandum of association.
Co-operatives
A co-operative registered under the Victorian Co-operatives Act 1996 must have a set of 'rules' that
make up its constitution. Usually the aims of a co-operative are expressed by specifying its “primary
activity” in the rules. The rules may also include objects.
Whether your organisation is an incorporated association, a CLG or a co-operative, it can only change
its constitution by passing a 'special resolution' at a formal meeting of members. It is important that
the statutory (legal) requirements for a special resolution are complied with, otherwise the resolution
will not be valid and the changes will not take effect.
A special resolution means the resolution needs to be supported by 75% of members’ votes at a
general meeting to pass (compared to a majority vote). There are extra statutory requirements for
passing a special resolution (discussed below).
As well as complying with statutory requirements, you also need to comply with any extra requirements
in your own constitution. For example, the rules of a locally-based organisation may require the
approval of the national body before changes to the local organisation's rules are effective.
Incorporated associations and companies
The following are the statutory requirements for a valid special resolution for both incorporated
associations and companies:
 a special resolution can only be passed at a general meeting of members. This can either be the
annual general meeting (AGM) or a special general meeting. A special resolution cannot be passed
at a committee or board meeting, or by a resolution without meeting (except in the rare case of
companies with only 1 member)
 at least 21 days’ notice of the general meeting must be given to all members (and, for companies,
to their auditor and to any directors who are not also members)
 the notice must state the text of the proposed special resolution
Changes to an organisation’s constitution or rules
© 2014 Justice Connect. This information was last updated on 26 November 2012 and does not
constitute legal advice, full disclaimer and copyright notice at www.nfplaw.org.au/disclaimer.
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 the notice must specify the intention to propose the resolution as a special resolution. Preferably,
use words along the following lines

It is intended that the following resolution be proposed as a special resolution, or

The following resolution will be proposed as a special resolution,
However, provided the notice makes it clear that the proposed resolution is a special resolution,
this requirement will be met, and
 the special resolution will only be passed at the general meeting if at least 75% of those members,
who vote on the resolution, vote in favour. This includes members who are not actually present
themselves but whose 'proxies' (see below) cast votes on their behalf. It excludes those members
who abstain from voting (for example members who do not attend the meeting, or who attend but
abstain from voting at the meeting).
A proxy is a person you authorise to vote on your behalf if you cannot attend a meeting yourself.
The appointment of a proxy is usually required to be in writing using a specified form. Organisations
may have rules about when proxy forms need to be received (eg – at least 48 hours prior to the relevant
meeting). Proxy voting is permitted for all CLGs, but may be excluded by the rules of an incorporated
association
Co-operatives
For co-operatives, the statutory requirements are similar to those set out above, except that:
 the proposed alteration of the rules must be submitted to the Registrar of Co-operatives at
Consumer Affairs Victoria (CAV) for approval at least 28 days before notice is given. The notice form
is available on the CAV website (see the Related Resources section below)
 the notice must also specify the reasons for the proposed special resolution, and the effect of it
being passed
 at a general meeting, the special resolution only requires a 66% majority of those present and
voting (including by proxy)
 special resolutions may also be passed by a two-thirds majority of those members voting in a
postal ballot in accordance with Schedule 3 of the Co-operatives Regulations 1997 (Vic), but only if
this is expressly permitted under the rules of the particular co-operative - check the rules, and
 the rules of a co-operative may also be altered by a resolution passed by the co-operative's board,
but only if the alteration does no more than give effect to a requirement of the Co-operatives Act
1996 (Vic).
The law requires that members receive full and fair notice of matters that will be addressed at a
meeting. The notice should be clear and provide adequate explanation, so that when a member scans
Changes to an organisation’s constitution or rules
© 2014 Justice Connect. This information was last updated on 26 November 2012 and does not
constitute legal advice, full disclaimer and copyright notice at www.nfplaw.org.au/disclaimer.
4
the notice, they can understand clearly whether the matter/s to be addressed are ones that concerns
them or not, so that they can decide whether or not to attend the meeting that the notice relates to.
Where changes to rules are concerned, full and fair notice means:
 the proposed changes need to be clear
 an explanation of the effect of the changes should be provided, and
 an explanation of the reasons for the proposed changes should be provided.
An explanatory document or table can be a good way to explain the proposed changes and their effect
to members.
It is not essential to provide members with a full copy of the proposed new constitution if the proposed
changes have been made clear in the notice. However, it is good practice to provide members an
opportunity to review the exact wording of proposed changes by providing an email address or contact
number through which members can request a copy. If there aren’t too many changes, it can be
helpful to show the changes tracked against the current version of the rules.
If you are making lots of changes to the rules, it can be easier to put a “new” set of rules to a
vote - this only requires one resolution to be voted on. However, if some of the changes are
controversial (and may not be passed) it can be better to separate out the controversial changes
(into separate resolutions). If you are putting one resolution to your members to adopt a new set of rules,
you still need to set out what the changes are and the effect of the changes.
Incorporated associations and co-operatives
For incorporated associations and co-operatives, a special resolution to change the constitution will
only take effect once it has been approved by the Registrar of Incorporated Associations or the
Registrar of Co-Operatives. For both types of organisations, a form must be lodged with CAV within 28
days of the vote.
For incorporated associations, CAV will review the changes after the vote, and will approve the
changes (or reject them).
For co-operatives, CAV will review and approve changes prior to a vote. The changes will not take
effect until CAV is notified of the successful vote.
Companies limited by guarantee
For companies, a special resolution to change the constitution takes immediate effect (unless
otherwise set out in the resolution (e.g. from x date the constitution will change to…). However, a copy
of the special resolution and the changes to the constitution must be lodged with Australian Securities
and Investments Commission (ASIC) within 14 days of the vote.
Changes to an organisation’s constitution or rules
© 2014 Justice Connect. This information was last updated on 26 November 2012 and does not
constitute legal advice, full disclaimer and copyright notice at www.nfplaw.org.au/disclaimer.
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Updated copies
All types of organisations should make sure copies of the consolidated constitution (that is, the
constitution with all amendments made) are provided to committee members/directors so that they
can familiarise themselves with it. Copies of the constitution must also be provided to any member
who requests one. Any member is legally entitled to a copy of the constitution (although for companies
and co-operatives there may be a small fee).
Schedule requirements
For incorporated associations, check that the rules as amended provide for each of the 23 matters
specified in the Schedule to the Associations Incorporation Reform Act, otherwise CAV will reject the
amendments and new members meeting will have to be held.
It’s a good idea to prepare a list or table, cross-referencing each of the items in the Schedule with the
rules as they will be once the amendments are approved. Write the applicable rule numbers against
each of the matters required to be included. That way you can see if anything has accidentally been
left out.
Rights and liabilities of members
Any changes to the constitution that affect the existing rights of members or that may increase their
potential financial liability need to be approached with particular care. In such cases, unless the
changes are completely uncontroversial, it will be prudent to seek legal advice.
Transitional arrangements
Be careful when changing your constitution, (especially if you replace the whole constitution), that the
members under the old constitution remain members under the new constitution. Problems can arise
when the categories of membership or the eligibility for membership change.
Similarly, you may need to make it clear that, despite the changes to the constitution, the office
holders of the governing body (e.g. management committee or board) under the old constitution
continue in office under the new constitution. Alternatively, there may need to be an extraordinary
election for the new governing body, or the officer holders may need to be specified in the new
constitution, with effect from a given date. If unsure, seek legal advice.
Tax status
If your organisation has been endorsed by the Australian Taxation Office as a Deductible Gift Recipient
(DGR) or is exempt from income tax, whether as a Tax Concession Charity (TCC) or otherwise, you also
need to make sure that any changes to the constitution will not jeopardise your tax status. In
particular, any changes to the purposes of an incorporated association, the objects of a CLG or the
activities of a co-operative, and to the winding up provisions of these organisations should be
approached with care. If unsure, seek legal advice.
Changes to an organisation’s constitution or rules
© 2014 Justice Connect. This information was last updated on 26 November 2012 and does not
constitute legal advice, full disclaimer and copyright notice at www.nfplaw.org.au/disclaimer.
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Funding agreements
If you receive funding from an outside body (for example, a government department or philanthropic
trust), check that the proposed changes do not conflict with anything in the relevant funding
agreement or terms and conditions of the grant. Also, once any changes have been made, you may be
required by the funding documents to send a copy of the new constitution to the funding body.
Changes to an organisation’s constitution or rules
© 2014 Justice Connect. This information was last updated on 26 November 2012 and does not
constitute legal advice, full disclaimer and copyright notice at www.nfplaw.org.au/disclaimer.
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Related Not-for-profit Law Resources
Getting Started
Not-for-profit Law’s Getting Started page of the Information Hub has information on incorporating and
choosing a legal structure.
Running the Organisation
Not-for-profit Law’s Running the Organisation page has information on governance, meetings and
record keeping and features the popular Secretary’s Guide.
People Involved
Not-for-profit Law’s People Involved page has information on members, clients, employees and
volunteers.
Legislation
Associations Incorporation Reform Act 2012 (Vic)
This legislation regulates incorporated associations in Victoria
Co-operatives Act 1996 (Vic)
This legislation regulates co-operatives in Victoria.
Corporations Act 2001 (Cth)
This legislation regulates companies in Australia. Not-for-profit's usually incorporate as companies
limited by guarantee.
Consumer Affairs Victoria (CAV) resources
Incorporated associations
Database of Victorian incorporated associations
This is a CAV database where you can search to find Victorian incorporated associations and cooperatives.
CAV's incorporated associations information
This section of CAV's website has information about incorporated associations. Click on the fees,
forms and online transactions link for the forms for changing your incorporated association's
constitution or rules.
Co-operatives
CAV's co-operatives information
This section of CAV's website has information about co-operatives. Click on the forms and publications
link for the forms for informing CAV about proposed changes to your co-operative's constitution.
Database of Victorian co-operatives
This is a CAV database where you can search to find Victorian incorporated associations and cooperatives.
Changes to an organisation’s constitution or rules
© 2014 Justice Connect. This information was last updated on 26 November 2012 and does not
constitute legal advice, full disclaimer and copyright notice at www.nfplaw.org.au/disclaimer.
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Australian Securities and Investments Commission (ASIC) resources
ASIC database for companies
This is the ASIC database where you can search to find all types of companies in Australia.
ASIC special resolutions information
This link provides information about special resolutions for companies limited by guarantee, and
includes a link to the form (205) which needs to be submitted to ASIC to notify of changes to
constitution
Australian Charities and Not-for-profits Commission
Information on changing from ASIC to ACNC regulation and reporting
This ACNC webpage explains who will automatically transfer so be registered with the ACNC and
transitional arrangement for moving from ASIC to the ACNC as a regulator.
Commonwealth Government Resources
Business.gov.au - ABN Lookup
ABN Lookup provides access to publicly available information provided by businesses when they
register for an Australian Business Number.
A Not-for-profit Law Information Hub resource. Access more resources at www.nfplaw.org.au
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Changes to an organisation’s constitution or rules
© 2014 Justice Connect. This information was last updated on 26 November 2012 and does not
constitute legal advice, full disclaimer and copyright notice at www.nfplaw.org.au/disclaimer.
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